The Biggest Risk: Complacency Over Fiscal Cliff

Even a deal to avoid fiscal cliff points to a profits drop, contrary to hopes for double-digit gains in 2013.

Just a few words from Harry Reid Tuesday were all it took to dispel the stock market's misplaced confidence about a forthcoming solution to the fiscal cliff.

Major indexes were levitated nearly 4% during the last week's holiday-shortened and thinly-traded sessions by growing certainty that Congressional leaders and the White House would actually succeed in preventing a self-inflicted wound on the U.S. economy in the form of drastic tax increases and spending cuts. But news that the Senate majority leader called talks on...